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#LEND360 ● LEND360.org
Kirk Chartier Enova International, Inc.
online lending trends &
consumer driven innovation
Kirk Chartier
things are
for U.S. consumers
looking up
77.5
84.6 87.2
2013 2014 2015 Source: “Surveys of Consumers,” University of Michigan, Aug. 2015
The Index of Consumer Sentiment
Inde
x of
% o
f G
ivin
g Fa
vora
ble
vs U
nfav
orab
le
U.S. FICO Score Distribution Over Time
Source: http://www.fico.com/en/blogs
2%
7%
12%
17%
22%
300 - 499
500 - 549
550 - 599
600 - 649
650 - 699
700 - 749
750 - 799
800 - 950
2012 2013 2014
% o
f Ad
ult
Popu
latio
n
Civilian Employment – Population Ratio
Source: US. Bureau of Labor Statistics, Civilian Employment-Population Ratio, Federal Reserve Bank of St. Louis, October 9, 2015
The Real Presidential Candidates of Pennsylvania Avenue
people like
the online model
Source: U.S. Census Bureau, 2013 American Community Survey
Percentage of Households With Computers and Internet Use 2013
48.4
69.0
84.9
92.7
94.9
62.4
81.1
92.6
97.1
98.1
Less than
$25,000 to
$50,000 to
$100,000 to
$150,000 and
Computer Ownership
Source: eMarketer
U.S. Smartphone Penetration 2010 to 2017
20.2 29.8 38.7 44.3 50.1 55.4 59.8 63.5
% o
f Ad
ult
Popu
latio
n
Source: : idScan.net
Magical Mobile Devices
Source: “Banks Not Meeting Mobile Banking Customer Expectations,” February 7, 2013, The Financial Brand
Functions Desired by Consumers in a Banking App
54% Send notice of irregular account activity or changes
51% Make a payment on a loan or a bill
46% Sending notice of a low balance
44% Transferring money to accounts outside of my account
43% Deposit a check from a mobile device
41% Sending automated bill pay reminders
Source: “Cash Continues to Play a Key Role in Consumer Spending,” Bennett, O’Brien, Advincula, Federal Reserve System’s Cash Product Office, Apr. 2014
Payment Use by Household Income 2014
Aver
age
Num
ber
of P
aym
ents
per
Mon
th
focus on the right consumers
use a structured approach
filter your findings
focus on consumer needs, not features
take a second, and third, look
consumer driven innovation
the rich are
getting richer
Servicing the growth in Prime and SuperPrime consumers
Source: “Online Lenders Rely on Old-School Marketing,” Rudegeair, Wall Street Journal, Oct. 1, 2015
“Thanks in large part to online lenders, the average monthly volume of personal-loan offers sent through the mail has more than doubled in two years to 156 million in the year through July from 73 million in the same period in 2013. In July alone, LendingClub mailed 33.9 million personal-loan offers, more than double the amount during the same month in 2014,”
what about
NonPrime America?
Source: : Leo J. Shapiro, Nov, 2014 & CFSI 2012 Average SDC Consumer Rating of Importance in selecting product
Most Important Factors in Small Dollar Credit Lender Choice
Feat
ures
(%
in T
op 2
Box
Res
pons
e)
Source: “Designing High-Quality Credit,” CFSI, Sep. 2015
Touch-based Design for “Flexibility” and “Loan Amount”
Conversion Rate of Applicants Who Viewed Contract
Did not receive payment slider
71.0%
Received payment slider 86.2% Did not use slider to change payment amount
85.7%
Used slider to change payment amount
87.2%
Total 77.5%
Algorithmic Underwriting
“Credit-based insurance scores may benefit consumers overall. Scores may permit insurance companies to evaluate risk with greater accuracy, which may make them more willing to offer insurance to higher-risk consumers. Scores also may make the process of granting and pricing insurance quicker and cheaper, cost savings that may be passed on to consumers in the form of lower premiums.”
- Federal Trade Commission
Source: “Credit-based Insurance Scores: Impacts on Consumers of Automobile Insurance ,” FTC, Jul. 2007
Automated Data Feeds Analytics Engine with Secure Data
Transaction Analysis Used To Increase Likelihood of Approval
Base Underwriting
Secondary Underwriting
Improved Offer
Social Media or Geo Data for Additional Verification
Facebook, Twitter, LinkedIn, Yelp (for business) ID Verification score
“Social Proof” Models
LinkedIn, Yelp, Google Places Verification scores for employee and employer
Employment / Business Validation
Source: CFPB Factsheet on Outline of Proposals Under Consideration, March 26, 2015
CFPB Outline of Proposals Under Consideration
consumers restricted to three or less loans in a row
consumers restricted to 90 days or less of borrowing a year and generally 60 day with no loan after a covered loan
consumers must submit documents to verify application information
lenders discouraged from allowing consumers to use pre-authorized electronic
payments
lenders discouraged from lending to nonprime consumers whose credit risk would result in rates above 36%
Multiple Product Offerings
Outsourced Services
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